The Latest Spanish Property News from Kyero.com

The fates of both Marbella developers and the owners of 30,000 homes in legal limbo could be sealed this month as town hall administrators finalise a solution to abuses highlighted by Operation Malaya. Reports suggest they will ask developers to buy greenbelt land to offset “illegal” land, which they had been developing until the scandal broke in April 2006.

However, the developer of the Los Vistas project told Andrew Winter, presenter of Channel 4’s Selling Houses Abroad recently that he would not buy land or refund victims of the scandal because he believes Los Vistas was “also a victim”. This view was criticised by Richard Castro, commercial director for developer Grupo GMB, who said: “I do not believe that there are unfortunate developers who unknowingly purchased land. Surely, it should not be down to willingness, they should be brought to account for the impact on the thousands of developers that do build legally and conscientiously.”

Spanish property writer Sarah Drane said the proposal is wise. “This should bring a dramatic reduction in the number of projects coming in the next few years,” she said. “Of the 80-plus planning applications lodged at the town hall when the scandal broke, all but a few have already been thrown out.”

There have been 94 arrests in the past 12 months, including Juan Antonio Roca, the former town planning adviser accused of masterminding the £1.7billion swindle. According to reports, the public works officer at Marbella’s town hall also wants Roca to personally compensate the owners of 950 properties most at risk.

“These 950 homes are thought to be built on land that would never have been zoned for homes and it is likely that some will be demolished, partly to make an example of the worst offenders and also to indicate that the authorities really do mean businesses in the future,” said Drane.

Story from OPP (Registration required)

Spain is coming under renewed pressure to change its ‘land grab’ laws following adoption of an EU report branding the current position a violation of human rights.

The report comes from the Petitions Committee, of which UK MEP Michael Cashman is vice chairman. Co-author of the report, which has now been adopted by the committee, Cashman and other committee members had visited Andalucia, Valencia, and Madrid in February to hear at first hand of problems caused to property owners by the law.

‘The Petitions Committee remains concerned and deeply troubled as a result of the persistent and long standing denial of the legitimate rights of many European citizens in Spain, most notably in the Valencian Region, to their land and their homes’, said the report. ‘They have become the collateral victims of many rampant urbanisation programmes founded upon legislation which provides privilege and wealth for the urbaniser and which denies individuals their very integrity’.

In a large number of documented cases town councils have concocted urban development plans less because of their real requirements related to population growth and tourism, more because of what often appears as their greed and avarice, charged the report.

The local residents, whether Spanish or not, are the most affected by development programmes and have the most to lose - in too many cases they actually risk losing everything they have worked for, said the report.

‘This is more common in the Valencian region than anywhere else. For it is in this region that the delegation from the Petitions Committee came up against the most arrogance and the least explanation for the urbanisation projects which have led to the destruction of many beautiful and fragile coastal areas’.

However, serious problems also exist in many other areas of Spain.

The report calls for the European Commission ‘to fully take into account and assess the issues raised in this report, particularly as regards the possible infringement of EU law and basic rights and principles contained in the EU Treaty as they affect the citizens who have become the victims of extensive urbanisation’. It also ‘calls upon the Spanish authorities and regional governments, in particular the Valencian Government, who are under obligation to respect and apply the provisions of the EU Treaty and EU laws, to recognise the individual’s legitimate right to his legally acquired property and to establish, in law, more precisely defined criteria regarding the application of Article 33 of the Spanish Constitution concerning the public interest, in order to prevent and forbid the abuse of peoples’ property rights by decisions of local and regional authorities’.

The report is due to reach the European Parliament in June. Action ultimately lies in the hands of the European Commission which has power, ultimately, to refer the issue to the European Court of Justice.

In parallel developments the Commission has already written to the Spanish Government asking it to justify its property laws and to explain how it believes these comply with EU law. The Commission is expected to continue to push for change and with the added support of the Petitions Committee findings could be in a position as early as the summer to call on the European Court of Justice to rule on the legality of current Spanish property laws.

Story from fly-2let.co.uk

In response to a number of planning complaints from residents in Madrid, Valencia and Almería, a fact-finding mission in these regions was undertaken at the of February - led by the president of the European Parliament’s Petitions Committee, Marcin Libicki, and his Deputy, Michael Cashman, MEP.

Based on these investigations by EU inspectors, the report claims that large swathes of fragile Spanish coastline are being destroyed by irresponsible planning, and accuses local authorities of arrogance in their decision-making. It added that planning abuses in some areas had increased urban populations to unsustainable levels.

Condemning urban over-development and the notorious ‘land-grab’ law, as well as ‘generalised’ real estate abuse that exists in the country, it urged the Spanish government to do more to ‘recognise the legitimate property rights of individuals and prohibit the abuse of property rights by regional and local authorities’.

Commenting on its visit to Almería, the report blamed a ‘tacit agreement’ between the town hall and builders that allowed the construction of several hundred illegal homes in Albox, with some 2,000 houses in the Almanzora Valley now facing possible demolition. It added that residents of houses now identified as illegal ‘did not receive proper advice from either the local authority, surveyors or from local lawyers’.

The report specifically recommended that the regional government in Valencia should define by law the criteria for ‘public use’ to prevent further abuse of the coastline and protect the rights of foreign buyers. Focusing on civil rights, the report urged the European Commission to investigate whether extensive development has infringed Community Law or the rights and basic principles set out in the Treaty on European Union. The Petitions Committee approved the recommendations in this report last week.

In a recent report on the state of the market in Marbella, Christopher Clover, managing director of Panorama Properties, said between 40% and 60% of town hall income comes from urban developers and that Marbella is not an isolated corruption case. “In Valencia, 31.3% of citizens recently ranked corruption as their most serious problem.” According to the OPP’s recent survey of agents and developers in Spain (the full esults of which will be available in our full Spanish market report in July), 48% believe corruption is the main reason why buyers are being put off areas such as the Costa del Sol and Costa Blanca.

Despite the bad press Spain has received in recent months, Moneycorp recently found that 30% of overseas property investment enquiries were for a second home in Spain, compared with 14% in France. Commenting on its recent Foreign Focus Index, a spokesperson said: “Spain is still one of the top countries for people buying overseas property. The market is tried and tested, has a solid history of providing good investment and rental returns and has been a magnet for UK buyers for years.”

Story from OPP (registration required)

The emergence of property auctions in over-developed markets in Spain, Cyprus and parts of Eastern Europe indicate the next stage in the evolution of the second homes market.

Industry commentators observe that a crash in the UK property market over the last few years has been prevented by around one million buy to let investors and the growing number of auction houses. In spite of the number of repossessions, there is always an investor or developer waiting to acquire the property at auction. Landlord investors have long relied on distressed vendors to make their profit on the initial purchase, and rising repossession rates suggests this will become a lot easier.

David Sandeman, managing director of Essential Information Group, claims that there has been a major rise in the number of people buying at auction in the UK, with 50% of purchases from large-scale investors and developers and the rest from those hoping to get on the ladder or novice buy to let investors, he claims.

As the popularity of auctions begins to rise among property investors, tales of distress sales are becoming more commonplace in a range of destinations – particularly in parts of Spain, Cyprus and the coastal resorts of Bulgaria. Over-developed resorts in these markets are expected to see rising numbers of distressed vendors in the next few years as thousands of jet to let investors compete with each other for sales and tenants.

Several auction companies have sprung up in Spain in recent years, including Tenerife Property Auctions SL, Direct Auctions, Costa Blanca Property Auctions and Auctions in Spain.

Les Calvert, director of Worldwide Property Auctions, which includes Tenerife Property Auctions, says that auctions have become much more popular in Spain because of the sluggishness of the market. “Auctions are being used by people who are in a hurry to sell and in a flat market that is difficult,” he says. “Often properties go for 20% to 25% lower than the valuation. Sellers save money by getting a quick sale and buyers get a bargain”. The company also runs auctions in Italy, France and recently set one up in Cyprus.

With vendors unwilling to drop prices, and many citing agent commission as a major factor, auctions provide an option favoured by buyers and sellers. “By offering vendors a real alternative we are aiming at an untapped niche in the market,” said Inez Rix of Direct Auctions. “There is a huge oversupply of units in Spain which we then correctly value (bank valuations), we advise owners on a realistic percentage of that valuation and as we only charge 2.5% commission (plus the regulatory IVA) owners are more willing to drop their prices to nearer true market level.”

“With prices at a realistic level we are finding there are many buyers out there and, luckily, although things have been hard with the illegal builds issue (knocked off a few sales as banks were then refusing to lend on properties without an LFO), we are doing OK”.

While many agents may perceive auctions as a threat (developers are already using this as a way to shift inventory), they are helping to persuade vendors to price their homes more realistically.

Story from OPP (registration required)

“New owners often ask our advice on how to generate high levels of bookings” says Richard Speigal of espanabreaks.com, “and we have come to know very quickly which properties will do well - and which won’t”.

The good news is that attracting lots of renters isn’t rocket science. If you follow a few key principles, you should make money from rentals year after year. This article explains the key strategies to make you a successful holiday home owner.

1. Advertise carefully Advertising holiday homes online is the accepted norm for most owners. It’s cheap, easy to set up and produces good returns. Most owners will advertise on several wesites, spending anything up to £500 per year.

You should expect an advert to generate at least 30 enquiries per year and you should be converting at least 30% of these enquiries into confirmed bookings.

Doing the maths on a typical apartment costing say £250 per week, this should produce at least 10 weeks booked per year - or rental revenues of £2,500. An excellent return on your advertising cost!

Some rentals websites include statistical tools telling you how many people are looking at your advert. A well constructed, attractive advert should see at least 2-3% of visitors turning into enquirers. So for every 100 visitors, you should get at least 3 enquiries. Tips 2, 3 and 4 (below) will help you achieve this.

2. Create a visual WOW factor Creating good pictures of your property is more important than anything else in attracting renters. It’s also something many owners get wrong!

If you insist on taking pictures yourself (a pro photographer is better), then spend time to ensure they look their very best. The fuel of photography is light - so open the curtains and turn on lamps. Tidy up before you start and prepare the scene before shooting: place towel sets on beds, lay the dining table, etc.

Never take pictures of the toilet (regardless of how nice the bathroom is) and never include people in your pictures. Renters want a blank canvas to work from.

3. Create a visual WOW factor Let’s repeat again: TAKE GREAT PICTURES! It will make or break your advert.

4. Prepare an enticing write-up If visitors like your pictures, then they’ll take the time to read about your property. A good description is ideally 3-4 paragraphs, totalling no more than 300 words. This should be enough to be interesting (without being boring) and the right length to read quickly.

Concentrate on describing the property, giving a room-by-room walkthrough and overview of the features and facilities. By all means talk about the surrounding area but this should not be more than a paragraph - you are not writing a tourist guide, you are selling your property.

Finally always check your spelling and grammar and NEVER USE ALL CAPITALS - it looks like you are shouting!

5. Set inclusive pricing As an owner it can be tempting to have your prices match your costs e.g. by charging a supplement for pool heating or a welcome pack. However renters hate supplement packed pricing, in the same way we all hate surcharges on flights!

Always try to set a price that includes all the things most renters will want. It’s easier to follow and it won’t look like you are penny pinching.

6. Check your contact details If you add your telephone number, e-mail or website address to an advert always check it carefully. A surprising number of adverts have incorrect contact details - check everything twice.

7. Answer enquiries by phone Most online services will let you know you’ve had an enquiry via e-mail or SMS text alert. This doesn’t mean you should reply electronically!

Always phone enquirers as soon as possible: it gives both you and them a chance to get to know each other and hammer out the finer details. A speedy telephone response will boost your conversion rates more than anything else.

8. Don’t hide your availability When people search for holidays online, they get used to searching by date for flights, car hire and hotels. Therefore they expect to see your availability on their chosen dates.

It can be tempting to hide this but you will lose enquiries to owners who show their booking calendars and you’ll receive more wasted enquiries for dates you already have booked. Most websites allow you to add an availability calendar - always use it.

9. Avoid adding restrictions Every owner should have restrictions and booking conditions to protect their properties but an advert isn’t the place to explain them - remember this is a sales opportunity! Explaining your restrictions too heavily on an advert makes it look like you don’t really want renters. This is something you should tackle with enquirers at the point of booking.

10. Smile at all times Always be friendly and personal in all dealings with renters, both via e-mail and telephone. You are the sales person for your property and every new enquirer is potential revenue so be cheerful and informative at all times. Good customer service generates more bookings.

About the authors: España Breaks (espanabreaks.com) specialise in advertising holiday villas in Spain and offer a low cost, commission free way for holiday home owners to publicise their property for holiday rental. A two month free trial is available for Spanish property owners to try out their services.

Natwest International has become the first bank to become a member of the Association of International Property Professionals (AIPP).

As part of the NatWest International Personal Banking product set, NatWest offers a ‘Spanish Mortgage’ product to its customers wanting to buy a home in Spain.

The AIPP, a non-profit organisation, was set up to give consumers confidence and information on buying property abroad. It will guide and regulate the international property industry helping consumers to get the best possible support to easily achieve their ambition of buying their dream home. The AIPP aims to provide accountability and transparency for consumers looking to buy a property abroad.

Darren Fretwell, head of UK sales and international mortgages at NatWest International said: “The AIPP’s sole aim is to improve professionalism in the international property market, helping the industry and the public. We want to give our customers confidence when they come to us and they will now have that safety net. We are there to support and guide them through the process of buying their dream property abroad.”

Story from mortgagesolutions-online.com

THE largest purpose built tourist resort in Europe is to be constructed on unspoilt coastline in Murcia, Spain.

Politicians from the region’s ruling Partido Popular party have declassified 11,000 hectares of once protected, virgin coastline to accommodate plans for a huge scale project that will see homes for 60,000 people built.

Central Government, environmentalists and worried local residents are appealing to courts to stop work on the development that will also see five golf courses and 22,000 hotel beds built in the Cabo de Cope-Puntas de Calnegre Regional Park, near the border with Andalusia.

However, judges in Murcia have warned the project will go ahead even if opponents to the project are successful in their appeal as Cope has lost its Natural Park status.

The Government of Murcia has been studying plans to declassify the land since 2001, when the regional Land Law was passed. Critics of this law claim an amendment was added at the eleventh hour that changed the status of thousands of hectares of Murcia coastline.

The exact scale of the declassification is yet unknown but experts at Murcia University claim as much as 14,000 hectares of wild coastline is set to be lost under the law.

The regional Government denies the figure is so high, placing their estimates at 7,000 hectares.

In addition to the homes for 60,000 people, the Marina de Cope project will include 22,000 hotel beds, five golf courses and an artificial marina with room for 2,000 boats. Costing more than 3,800 million euros, the complex will occupy 2,156 hectares, 1,843 of which lost their protected status in 2001.

The regional government has defended its decision, claiming Marina de Cope is of regional interest. The socialist PSOE council of Lorca and the PP conservatives of nearby Águilas have also thrown their weight behind the plan.

According to todosaguilas.com, the latter town’s council website, Marina de Cope will “increase the tourism in the south of Murcia. It will follow a model of quality development and sustainability.”

Madrid and local groups made up of environmentalists and worried residents have appealed to judges at the Supreme Court of Murcia to stop the declassification of land that will allow the project to go ahead.

Local chef David Sánchez said: “The regional government has not considered the environment when they decided to declassify the land. The developers will get a lot of money out of this and the poor will pay.”

Some locals are in favour of the multi-million project. Concha Conejero, a nurse from Murcia, said: “There is a lot of interest in the Murcia coast. If these construction projects create money and employment for people in run-down towns like Aguilas then I am in favour.”

Cope is known by locals as the jewel in Murcia’s crown. Within the Cabo de Cope-Puntas de Calnegre Park, there are eight habitats protected by the European Union.

The area is also home to one of the few remaining populations of spur thigh tortoise (Testudo graeca) in Spain.

Its vegetation is similar to that found at Cabo de Gata, 100 kilometres to the south: dry scrub, semi-desert conditions. However, the area is valuable to construction companies as it contains some of the few remaining kilometres of Mediterranean coastline untouched by development.

A large part of the area in which Marina de Cope is projected was owned by energy company Iberdrola, whose officials had wanted to build a nuclear power station there 25 years ago.

Then in 2004, the company sold 40 per cent of the 328 hectares it owns at Cope to banks Cajamurcia, Bancaja and Caja Castilla-La Mancha for 36 million euros.

The immediate area has also witnessed the opening of a new multi-million-euro dual carriageway recently. The AP7 links Vera in Almería with Cartagena in Murcia. Hugging the Mediterranean coast, the road passes close to where huge scale construction is scheduled to take place. Besides Cope, housing estates and hotel developments are planned for the coastal villages of Los Lobos, Ramonete and Las Palas.

Julia Martínez of Ecologistas en Accion has no doubts the road is, primarily, for La Marina de Cope: “They wanted to build this road for the largest tourist resort in Europe. It conflicts with the sustainability of the coast.”

A deal to build a new international airport 15 kilometres from the city of Murcia was also made on March 30.

Story from the olive press.es

A growing number of British retirees are hoping for a better standard of living by downsizing and relocating overseas. Over one million Brits are currently receiving their pension abroad, according to the Institute of Public Policy Research, and this is expected to more than triple to 3.3 million by 2050. Three quarters (750,000) of those drawing their state pension abroad have relocated to Spain.

However, Bank of Scotland International recently warned those planning to retire to Spain that they may no longer continue to receive pension credits. It also highlighted tax liability related to early retirees. Currently, only those people resident in the UK are able to take 25% of their pension lump sum tax-free and if a client is liable for tax in Spain before they start drawing their pension they may find that this 25% is taxable as well. The Bank recently explained how IFAs can add value by helping those planning to retire to Spain to avoid a double hit on Inheritance Tax.

Last year, the Foreign and Commonwealth Office (FCO) highlighted the plight of British expats living in squalor in parts of Spain as inflation and poor financial management eroded savings. As IFAs offer more bespoke services, retirement developers are already working with banks and brokers on a solutions like home reversion schemes to help residents live to a comfortable standard – and for longer.

Retirement communities are also adapting their offering. They not only provide older buyers with a range of facilities and a community of similarly aged and like-minded people but, crucially, at a lower cost. Such communities are well established in the US, Australia and the UK, and taking off in places like Spain, France and Portugal.

Sol Andalusí, a gated community set in 130,000 square metres of landscaped sub-tropical gardens in Spain, claims to be the first project in Europe to offer ‘healthy living’ through the combination of a fit and active lifestyle balanced with a high-level of medical care and security. “The cost of living is much cheaper here in Spain (€7 dinner at a typical Venta, 3 course exclusive meal here at sol for €12.50), but also insurances, taxes for retirees, transportation, etc,” said Coen Moonen, Sol Andalusi’s commercial director.

“Medical care is better arranged and also much cheaper, clients can get a private nurse at sol Andalusi for around €12 an hour, but also the seguridad social is free for retirees. SA works with the seguridad social and SA also gives the opportunity to rent or lease next to buying, so clients don’t have to take finance and can have equity to live from.”

Recently comparing the cost of buying in Spain with the UK, Mark Wilkins, a Marbella lawyer from The Rights Group, highlighted new findings that favour a move overseas.

“Many people who plan to purchase a retirement property abroad may be able to do so without needing a mortgage,” said Wilkins. “According to new data published by Retire to the Sun (23.03.07) online mortgage company - mform.co.uk - 13% of UK citizens planning to buy a new property in the near future expect to be able to do so without borrowing money. The majority are older people looking to downsize and take advantage of recent house price increases.

“Buying in locations, such as Spain, where it is typically cheaper than in the UK, mean that people who retire abroad could free up more cash from the move and enjoy a better standard of living.”

Story from OPP (subscription required)

More Britons than ever are buying in Barcelona. Graham Norwood gets the lowdown on how to find a chic retreat - or start a whole new life in the sun.

Barcelona is an attractive city for expats “Were I to get the hell out of England today, I’d probably go to Barcelona - it has all the good things, a good way of life, reasonable weather.” So says the diminutive Formula 1 boss Bernie Ecclestone - although, unlike many Britons, he hasn’t yet made the move.

There are now 4,721 British households, from singletons to families, living permanently in Barcelona. That’s up from 1,094 a decade ago - and the number is rising all the time. The classic expat’s property route is to rent in the old town - familiar territory for tourists who throng the city, but also close to areas most sought-after by Britons - and then buy after two or three months sussing out the local market.

Barcelona’s estate agents say that most Britons go for a flat around the old town in the Born, Gotico, or newly regenerated Raval areas, or on the beachfront. Those who know Barcelona well and have a slightly larger budget want a flat or house in the more expensive and elegant Eixample or Zona Alta areas.

Prices are not low in any part of the market - this city is, after all, the most expensive in Spain. The average Barcelona home costs €624,000 (£425,000), some 56 per cent above the figure for Spain generally. Kyero.com, a sales website that measures asking prices, says that a typical one-bedroom flat within the city is €327,500 (£223,000), and a two-bedroom flat €500,000 (£340,000). You’ll need €613,000 (£417,000) for the average three-bedroom home. Move on to a four-bedroom house and you must pay €916,050 (£624,000), while a five-bedroom property will set you back a cool €1.2m (£817,000).

“The preference is for period properties with contemporary interiors, but new-build flats are also popular for occasional use as they’re perceived to be less hassle,” says Alex Vaughan of the Barcelona-based estate agency Lucas Fox. He should know - he is one of the city’s British owner-occupiers, with a flat in a beachfront area called Diagonal Mar. “I’ve lived in London and Paris, and Barcelona beats both hands down,” he says. “It’s a city, but a small, relaxed one, and it’s easy to move around. The weather is great, you can eat and drink well and inexpensively, and there’s a great beach.”

But there is still a chance of finding a relatively low-cost property to refurbish, too. DIY and property speculation are not as popular in Spain as in the UK, so run-down properties can still be found at good prices.

For example, Stephen Proffer, who owns the wine bar L’Artiste Musclé in London’s Mayfair but splits his time between there and Barcelona, has bought and modernised a three-bedroom attico - a top-floor flat - in a house in Barcelona old town. He has built an extra bathroom, enlarged the kitchen, rewired and generally turned the interior into a stylish home for his Spanish wife Lali and daughter Sophia, who live there full time.

The end result is the classic modern Barcelona home, a period property from the outside but with a contemporary interior. “It was a good way into the local property market, and I’d done it before in the UK,” says Proffer. “And it only takes four hours door-to-door. The flight’s easy and there are never really any delays at the Spanish end.” he says.

So, once they have their ideal home, what do the British expats do? “Many hang out in pubs around town,” says Mark Stucklin, who runs www.spanishpropertyinsight.com, an online property advisory service aimed at Britons buying anywhere in Spain. He is the first to admit that, after six years of soaring prices (the 5.2 per cent rise in 2006 was the smallest since before the start of the new millennium), Barcelona is no longer an obvious place to buy purely as an investment, but it has massive lifestyle advantages for anyone wanting an urban second home, or to live there permanently, as he does.

Stucklin owns a three-bedroom apartment in Eixample, a few minutes’ walk from Paseo de Gracia, Barcelona’s version of Regent Street, but with less traffic and more elegance. “Quality of life in this part of town is exceptional. Everything one needs is just a few minutes’ walk away, and there is a good local community feeling,” he says.

“Barcelona attracts young people from all over Europe, so you find Brits, Dutch and Swedes, for example, socialising together. Catalans are friendly but tend to have their established social worlds, so foreigners tend to hang out with each other,” he says.

Britons wanting to move to Barcelona now have to come to terms with the fact that the best bargains have long gone, but agents insist that there is still plenty of growth to come - most predict 5-7 per cent price rises in each of the next two years. They say that up-and-coming areas include St Antoni and Poble Sec, both seeing a lot of new buyers so likely to have higher-than-average growth as demand outstrips supply. The Poble Nou district is being regenerated and many firms are relocating there, again suggesting more price growth in the pipeline.

But this city isn’t really about capital appreciation or rental income. It’s about culture, from Gaudi to Picasso, and a near-perfect lifestyle. Bernie Ecclestone knows a winning formula when he sees one.

Story from The Independent

Investing in property abroad? Good news - there’s a new watchdog protecting you from the market’s rip-off merchants.

We can spend months planning our summer holiday abroad but, incredibly, few of us spend enough time doing our homework when we are shopping around for a foreign home.

It’s a staggering fact that when we buy overseas - which British investors spent a whopping 20 billion pounds doing last year - we take fewer precautions than we do when purchasing a home in the UK. And yet it is likely that 90 per cent of the problems which result from this lack of judgement could be avoided if people did one simple thing: use independent legal advice on any prospective purchase.

It is this simply safety net - which clarifies issues of ownership - that The Association of International Property Professionals (AIPP), now celebrating its first birthday, has been impressing on consumers over the past year. “We don’t claim to be able to solve everything, but I just want to raise enough awareness to stop people making silly errors when buying overseas property,” says Paul Owen, their chief executive.

The AIPP was launched last March to provide a kite-mark for the overseas property industry. It is a non-profit organisation, now with 184 members (together employing 2,900 staff) who have all voluntarily signed up to a single code of conduct.

By providing accountability and transparency for consumers, it hopes to emulate bodies such as the Association of British Travel Agents (ABTA), which represents more than 80 per cent of UK travel agents and operators.

Owen says: “At the end of our first year, I cannot emphasise enough the following three things: you must get decent legal advice, you must question all promises of profits and rental yields, and you must never buy more than you can afford.

“The last point may sound obvious but it worries me that more and more people are putting all their money into one asset instead of spreading the risk. Find out exactly how much you are realistically going to get rather than take ludicrous promises at face value. If you are told that prices are going up by X per cent a year, ask why? Are promised rises due to economic realities that you can verify or are they just the developer’s hopeful projections?”

Martin Gow, head of International Group Development at Parador, a founder member, echoes this. “We hear all too often of customers complaining about the hard sell sales techniques of other companies. You can shatter people’s dreams by selling them promises you can’t fulfill - and these irresponsible companies are dragging down our industry. “I think all major overseas companies should join up but sadly many big players don’t have the quality controls to live up to the high standards demanded by the AIPP code. It’s a very proactive body, not just an old boys’ network of backslappers.”

Owen reports 35 official complaints in the first year and compensation cases have been launched as a result of many of them. He has also persuaded the first bank to become a member, Nat West. While Nat West doesn’t sell properties, it does provide finance, legal advise and valuations in Spain where it has a network of representatives.

Darren Fretwell, of Nat West’s International Mortgages sector says, “We are proud to be the first bank to join the AIPP. More and more people want to buy properties abroad and dealing with a member of the AIPP makes the process easier, giving investors guidance and confidence when buying their overseas dream home.”

Article by Liz Rowlinson of the Daily Mail.

Visit aipp.org.uk

The holiday home that pays for itself from tourist rentals sounds great in theory — which is why all those people trying to sell you property deploy the argument with such enthusiasm. But matters are not always that straightforward, especially in Spain.

Indeed, one of the biggest problems you face as the owner of a holiday home — apart from the oversupply of rental properties on many of the costas — is finding a letting agency you can trust to pass on your full share of the rent.

Take Trudie Day, 47, who was renting out her flat in Puerto de la Duquesa, on the Costa del Sol, through a local agency. “I did the cleaning after each client myself, because I live close by, so I knew exactly when the apartment was rented,” she says. “Even so, they didn’t pay me all the rent they owed me, and told me to prove it when I challenged them. I live in Spain, but still got conned.”

Helen Dalton, 38, from London, owns a flat along the coast near Marbella. She, too, used to employ a local agency. It was only after the business closed down that she noticed her property had often been used without her knowledge.

Dalton was so fed up that she now lets out the flat to a long-term tenant — even though they pay per month what she used to receive in a week during high season. “I’ll never get involved in tourist rentals again,” she says. “You just don’t know who has the keys to your property.”

Jane Moore, a solicitor with Murphy Lawyers in Marbella, has come across many cases of absentee landlords being ripped off. “I’ve heard of rental-agency staff using client properties without permission for all sorts of things, including family holidays,” she says. “If you don’t live locally, it’s hard to know what is going on in your property.”

Thanks to the internet, you can get round the problem by renting your property out yourself. Various websites allow you to advertise to a wide audience, take bookings and publish availability, all for a fixed fee.

“You save the 20% or more that rental agents take, and you know exactly who is in your property,” says Ross McGowan, sales director of one of the largest sites, Holiday Rentals, which claims to have more than 22,000 properties on its books. “If you treat it like a business, and dedicate time to it, it can be very rewarding.”

All this requires effort, however, and many owners of holiday homes still prefer to use a rental agency. The challenge is to find a good one. “Ask for client recommendations,” advises Moore. “Check rental agreements carefully, making sure that the rental agency’s responsibilities are described in detail. Keep an eye on your utility bills, so you know when the property is occupied, and check them against bookings.” Also important is clear and detailed documentation — if your agency is reluctant to provide it, then alarm bells should start to ring.

Long-term letting may have been the solution for Dalton, but even this is not without problems: rental law in Spain is skewed in favour of the tenant, and it can take years to evict nonpayers, especially if they have children.

Vince Barnes, 42, a professional musician from Newcastle upon Tyne who lives in Valencia, has had his share of troublesome tenants at his property in nearby Gandia. “I’ve had enough of being a landlord in Spain,” he grumbles. “Short-term rentals are a pain in the neck, and when I switched to long-term lets, the tenants paid only four months out of nine, did €2,000 [£1,350] worth of damage and left me €3,000 [£2,030] out of pocket, not to mention all the time and aggravation.”

Many rental agencies recommend using an 11-month rental contract rather than the long-term variety (12 months or more) that gives tenants so much protection. Even in such cases, however, landlords must still follow the normal eviction procedures against tenants who don’t pay the rent.

Owners should resist the temptation to change the locks or disconnect the utilities; this is against the law and could lay them open to legal action.

Word of the cushy deal tenants get from Spain’s rental laws must have reached the UK. A growing number of Britons are reportedly taking advantage of the law to live rent-free in Spain, some of them in luxury apartments in glitzy hot spots like Puerto Banus. The Spanish press recently claimed that more than a quarter of delinquent tenants in Spain are foreigners, many of them British, living rent-free in popular tourist areas. Now even the squatters are moving to Spain.

Story from The Sunday Times

Many Britons dream of owning a property in the sun and, for many, Spain offers it all. However, when purchasing property in Spain, it is important to make sure that you work with specialists who are aware of all the necessary rules and regulations, says Banco Halifax Hispania.

If you do this, you will certainly be advised about the importance of making an early application for a ‘Número de Identificación de Extranjero’, which is an identification number for non residents and frequently referred to as an NIE.

Previously, British citizens buying in Spain were able to buy property before obtaining an NIE. Recent changes in Spanish law now require all foreigners buying a property in Spain to obtain an NIE and its accompanying letter before completing on a purchase. It is essential to apply for your NIE well before you are looking to buy a property as it can take two to six weeks for your number to be processed.

The NIE is also of prime importance for other reasons including:

• Setting up utility connections for electricity, gas and the telephone, you cannot be connected without an NIE
• To be used during all substantial financial transactions
• Applying for a Spanish driving licence and to validate an EU driving licence
• Applying for a business permit
• Any dealings with the tax authority, including rate payments
• Making purchases above 3,000 euros
• Inheriting any Spanish assets.

Before you can begin your Spanish property purchase, you must already have obtained an NIE. You can apply in person to the Oficina de Extranjeros (Foreigners’ Department) at your nearest Policía Nacional (National Police Headquarters). This used to involve an early morning start to avoid queuing as only the first 70 applicants were processed each day, but this restriction has also been lifted.

When applying for an NIE, an applicant from the UK must provide the following documents:

Completed and signed original application form and a photocopy of the completed form

• Passport (original and photocopy.)
• Address in the UK and address in Spain (you are able to use the address of a friend, solicitor or estate agent if you do not already have a property in Spain)
• Written justification of why you need the NIE (issued by an accountant, a notary, a solicitor, an estate agent, a bank manager, an insurance agent, a future employer, etc.)

It is also possible to apply whilst outside Spain, either to the Central Police Headquarters in Madrid or to your local Spanish consulate. In addition to the above documents, applicants applying for an NIE whilst still in the UK must also include two recent passport sized photos, a self addressed envelope and an envelope addressed to The Central Police Quarters in Madrid, which is large enough to contain all the above documents plus the NIE application form.

Once you have collected your NIE, it is advisable to make several photocopies and keep the original in a safe place. As many different bureaucratic processes require a copy of your NIE, it is important to ensure you keep track of it at all times. You will also need to make the local Policía Nacional aware of any changes to your address.

Ian Smith, head of European Operations at Halifax, said: “For many people, buying a property abroad is a very exciting time, but it is important to plan well in advance for your purchase. You need to get your NIE as soon as possible, as any hold-ups later down the line may mean that you miss out on your dream home.”

Banco Halifax Hispania offers a range of current accounts and mortgages for Brits looking to buy a second home in Spain. In addition, there is also an English speaking helpline within the UK for customers who wish to sort out their financial options prior to arriving in Spain. The helpline also answers queries about what is involved in buying in Spain and will guide customers through the application process.

Story from easier.com

Foreign investment in property in the Balearic Islands has fallen by 25 percent due to high prices, a report claims.

Once the favoured destination of Britons and Germans hunting that place in the Spanish sun, now the islands have fallen out of favour, claims a report published on Wednesday in the Spanish daily El Mundo.

Experts claim instead of what was once called ‘German fever’, with so many Germans buying up properties, now numbers have fallen in the past three years.

Mariano Ogazon, an estate agent who specialises in foreign clients, said: “In the last three years, Majorca has suffered a severe recession in terms of German and British buyers. We are talking a 25 percent fall.”

The cause, claims Ogazon, is the rise in prices, which now reach EUR 5,400 psqm for a medium class apartment and 4,500psqm for chalets.

Now only richer clients can afford to buy homes and the higher end of the market is the only one which is prospering, the paper claims.

Story from expatica.com

Over one million Brits are currently receiving their pension abroad and this is expected to more than triple to 3.3 million by 2050.

At present, three quarters (75,000) of those drawing their state pension abroad have relocated to sunny Spain. With this trend looking set to continue, Bank of Scotland International takes at look a drawing your pension in Spain.

Spain continues to be the most popular destination for Brits buying property overseas as it currently hosts 27% of all Briton’s second homes abroad. However, when retiring to the country’s sandy beaches, there are a number of factors to consider, the most prominent of which should be ensuring that all your finances are in order.

British Expatriates are entitled to receive both state and personal pensions when moving to Spain and state pensions drawn in Spain will continue to rise in line with inflation. However, you are only permitted to collect a state pension abroad if you have paid the requisite National Insurance Contributions over the years. It is also important to remember that any pension benefits you are entitled to in the UK may be affected by your move to Spain.

For those planning to live abroad for less than two years, another option is to arrange for your pension to accumulate, providing you with a lump sum upon your return to the UK.

Bank of Scotland International recommends that anyone planning to retire to Spain take the following issues into consideration:

Pension payments – Set up an account which allows you to receive your pension whilst also facilitating international banking.

Additional pension benefits – Any pension benefits that you receive in the UK may be affected by your move to Spain. For example, you will no longer continue to receive pension credits if you are living in Spain, although you may be able to continue to claim certain other benefits. Please refer to the Department For Work and Pensions’ (DWP) GL29 guide: Going Abroad and Social Security Benefits for additional information.

Contact the relevant Government Departments – It is essential to contact your Social Security Office, the DWP and the National Insurance Contributions Office so that they know you are moving to Spain and you continue to receive your pension.

Look into your tax status – You need to understand your tax status and how much tax you will pay on income received over your UK personal allowance. The IR20 guide from HM Customs and Revenue is a good source of information regarding this.

Understand your tax liability - People taking early retirement and moving to Spain before they are eligible to draw their pension will need to pay particular attention to the 25% tax-free rule. Currently, only those people resident in the UK are able to take 25% of their pension lump sum tax free. If you are liable for tax in Spain before you start drawing your pension, you may find that this 25% is taxable as well.

Evaluate the currency risk – You should consider the currency risk when living in Spain and spending Euros whilst drawing a pension in Pounds Sterling.

Tony Wilcox, managing director of Bank of Scotland International, said: “For many people, moving abroad is a very exciting time, but it is important to have adequate financial planning in place. Ensuring that you have made arrangements regarding your pension before leaving the UK can avoid a considerable amount of hassle at a later date.”

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